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Should you save your miles for future travel or cash them out now?

May 25, 2020
4 min read
Should you save your miles for future travel or cash them out now?
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Reader Questions are answered twice a week by TPG Senior Points & Miles Contributor Ethan Steinberg.

While no one knows exactly when travel will begin to return to normal, experts around the world are predicting a slow recovery and that it will take several years for demand to return to pre-pandemic levels. Many award travelers are using this time to build up their account balances and plan for future trips, but some are considering cashing out their points and taking a different approach. TPG reader Cynthia is trying to decide which course is right for her ...

[pullquote source="TPG READER CYNTHIA"]I am totally committed to earning points, but is it wise to bank those miles at this point for international travel like we always have before or should we spend them on merchandise or domestic travel? Our balances are getting very high and we don’t expect to travel internationally until probably 2022.[/pullquote]

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This is a personal decision to make, and what's right for Cynthia might not be right for you or your family. Normally, we strongly recommend against hoarding points and miles. "Earn and burn" is the name of the game, because points and miles lose value over time. This doesn't happen continuously and incrementally as it does with monetary inflation, but every time an airline devalues its award chart or adds new award booking restrictions, your miles are worth less.

It seems like Cynthia normally plays a pretty high-value points and miles game, especially if she saves up her points to use on longer international trips. I'm happy that she mentioned that she doesn't plan to travel much until 2022, because time is the most important factor in making this decision. The longer you let your points and miles sit there without using them, the more susceptible they are to devaluations.

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While most of us are itching to travel again, you need to be realistic with yourself about what your return to travel will look like. Maybe you won't be traveling as much for work now, maybe you'll be prioritizing shorter domestic trips over longer international ones, or even taking more road trips instead of flying.

I've always found earning points and miles to be the much easier side of the equation, especially compared to redeeming them. There will be plenty of options to earn more points in the coming years, including travel rewards credit card welcome offers and limited-time bonus categories. If Cynthia really doesn't expect to travel for more than a year and a half, I see no problem with cashing out some of her points for cash or merchandise she can use today.

I would encourage her to leave six to nine months worth of points in her account so when she's ready to start traveling again she'll have some cushion to do so. I'd also encourage her to be strategic in her cashouts, trying to get at least one cent per bank point or frequent flyer mile whenever possible. Obviously she won't be getting as good as value as if she were redeeming for flights, but there's no reason to throw away all that value in a fire sale either.

Related: Not traveling for now? How to maximize your rewards points on other redemptions

Bottom line

The return to travel is going to be slow and gradual, and for some people it might be a few years before they're traveling the way they did before the coronavirus hit. Hoarding points and miles is a bad idea as you're exposed to the risk of devaluations. Still, I wouldn't cash everything out either, but rather try and strike a balance where you keep some of your points and miles around but also redeem some for cash or gift cards you can use today.

Thanks for the question, Cynthia, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

Featured image by Getty Images

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TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,300+ lounges, including Capital One Lounges and the Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023